Summer volatility upon us; healthy sector rotation sets in

Here's what we're thinking

July 4, 2017

Global markets have generally moved sideways in wide ranges over the past couple of weeks with equity and bond markets largely flat while commodities have slid further as currencies gained in relation to the U.S. dollar. Global economic data trends have remained mostly consistent with forecasts for stronger growth this year, underpinning improved corporate revenue and earnings outlooks. However, a notable exception has been the data flow in the U.S. where recent modest disappointments have led to some marking down 2017 GDP forecasts (including the IMF), resulting in the consensus gravitating to our own house view (2.2%).